Govt seeks World Bank loans for Gwadar Port

ISLAMABAD: Pakistan has sought loans and technical assistance from the World Bank (WB) to develop infrastructure of the Gwadar Port, said an official who was at Monday’s meeting between WB President James D Wolfensohn and Dr Salman Shah, advisor to the prime minister on finance and revenue.

The official said Pakistan sought assistance in developing infrastructure of the energy sector. Mr Wolfensohn expressed his concerns about corruption in financial institutions and said many people had not paid back large loans to banks, the official said.

Dr Salman Shah said corruption had been eliminated at a higher level, but continued to be a problem at the middle level, which the government was trying to overcome by institutional strengthening and curtailment of discretionary powers of police and tax officials. The governor of the State bank of Pakistan, Dr Ishrat Husain, told the WB’s chief that the government was concentrating on strengthening the institutions to eliminate the financial corruption.

Abdullah Yusuf, chairman of the Central Board of Revenue (CBR), told the WB delegation that the government was introducing judicial reforms to the country and had doubled the salaries of tax collecting officers to stop corruption.

The CBR chairman said structural reforms had been introduced in the board and procedures had been simplified by the introduction of self-assessment in income tax.

Dr Shah apprised Mr Wolfensohn of the performance of the economy in the light of various reforms introduced by the government in various areas. The government’s poverty reduction strategy was also discussed and it was observed that the reforms had started delivering desired results and macroeconomic indicators were moving upward gradually. Dr Shah asked the WB to help Pakistan in achieving the seven percent GDP growth target and developing and implementing a private sector development strategy that would enable the sector to compete in world markets.

Dr Shah said Pakistan’s policies of privatisation, deregulation and liberalisation had worked very well. All major banks had been privatised and 80 percent of the banks were now with the private sector. The State Bank of Pakistan was now fully autonomous. The energy sector had been deregulated and the SECP had introduced transparency in corporate governance. The CBR was now a business friendly and transparent organisation, he said, and the GDP and the flow of FDI were both rising. Tax collection had improved, debt servicing ratios had improved and there was a visible decline in public debt. Dr Shah said that the lowering of inflation had provided greater monetary flexibility and bank interest rates had been brought down into single digits, which had encouraged private investment.

The WB delegation, besides its president, comprised Praful Patel, vice president of the South Asian Region, Robert Floyd, assistant to Mr Wolfensohn, John W Wall, country director, Abid Hasan, operations advisor and Thomas Buckley, acting country coordinator.

Source: Daily Times